Rising Japanese bond yields could shake global carry trade, crypto

Japanese government bond yields have surged to their highest levels since 2008, with the 10-year yield hitting 1.86%. This shift is significant because Japan has maintained ultra-low or negative interest rates for decades, which fueled the global "Yen Carry Trade"—where investors borrowed cheap yen to buy higher-yielding, riskier assets worldwide, including US Treasuries and cryptocurrencies. Analysts suggest that as domestic yields rise, this capital faces pressure to repatriate back to Japan, effectively breaking the financial anchor that supported this strategy. This reversal is poorly timed for the U.S., which needs significant Treasury issuance. The impact on crypto could be substantial, as the unwinding of cheap liquidity typically leads to sell-offs in high-risk assets like Bitcoin, which thrive under loose monetary conditions.

(Source：Cointelegraph)